May 29, 2017
Good evening ladies and gentlemen, thank you for joining the Pacific Financial Inclusion Programme (or PFIP) tonight for our first Innovation Hub in Papua New Guinea.
We have held Innovation Hubs in Fiji and the Solomon Islands and have used these opportunities to network with our partners and to discuss the development of Financial Innovation in the Pacific.
Up to March this year, the programme has funded 35 projects with financial service providers who have innovated with technology and products, enrolling over 1.6 million Pacific Islanders across the region with various financial services such as agency banking, mobile wallets, micro insurance, micro loans, remittances and savings groups. This figure represents one in four adults of the six countries in which PFIP operates. Women account for almost 770,000 of the total clients enrolled, representing significant progress in reducing the gender gap that exists in the Pacific.
These 1.6 million customers represent over one-quarter (or 27%) of the adult population in the 6 countries in which PFIP operates, providing a clear signal that Pacific Islanders see the value in accessing financial services.
These enrolments mark the first steps towards sustainable financial inclusion. For customers, enrolment is the beginning of a journey that generates increasingly tangible value as he or she uses the service to improve their daily financial life. PFIP usage indicators reveal a promising trend of customer adoption. Activity rates across the PFIP-supported portfolio are high, and show an upward trend across the portfolio with over half (or 55%) of current clients using financial services in the past 90 days and 43% active in the past month. These global numbers reflect very high usage rates for specific use-cases, for example, insurance, microfinance loans, or money transfers.
Our experience over the past nine years has shown that significant ground can be gained by improvements in transaction functionality, pricing, marketing, products, and agent network management. PFIP has adapted techniques from the Human Centred Design (HCD) industry to build a structured approach to supporting innovation with both policy makers and providers.
“HCD is an innovation approach to problem solving that starts with people and ends with solutions uniquely tailored to meet their needs. It is a repeatable set of steps, a highly generative take on gathering information, processing it, and quickly building and testing solutions.” (CGAP)
PFIP is setting up Innovation lab project models to test projects – for developing and validating solutions in preparation for scale up. The innovation lab approach represents PFIP’s most structured deployment of HCD techniques for designing, prototyping, teasing and scaling mass market financial services.
PFIP has mobilized a cadre of world class design talent from the emerging design industry which is focused on mass market financial services.
Currently, the programme has eight innovation lab projects underway in partnership with Westpac Banking Corporation, Vodafone Fiji, Solomon Islands Provident Fund, Fiji National Provident Fund, HFC, ANZ ……….. a subset of our 20 current partnerships with financial service providers.
Tonight we honour these on-going partnerships by awarding one outstanding financial service provider with the inaugural Reuben James Summerlin (RJS) Innovation Award. As mentioned by the Deputy Governor, the Innovation Award was established to commemorate the late PFIP Programme Manager, Reuben Summerlin, and honour his legacy to financial inclusion in the Pacific.
The Innovation Award is bestowed upon the PFIP financial service provider partner that has made the greatest contribution to Financial Inclusion in the Pacific for that year. Innovation can help reduce some of the challenges Pacific Islanders face in accessing financial services, particularly geographical distances in accessing the nearest physical bank branch, for example.
The Awardee is selected based on evidence of innovative client-centred approaches and products that best serve under-served segments of the Pacific population, leading to large-scale uptake and hence substantial impact on financial inclusion in the region.
It is my great pleasure to announce that the winner of the inaugural 2016 RJS Innovation Award is BIMA – for forging the way with innovative, affordable micro-insurance products across Papua New Guinea.
Globally, BIMA is a leading player in emergent market microinsurance, utilizing innovative mobile technology to reach previously uninsured populations to reach 20 million people across 15 countries with health and life insurance coverage.
BIMA began operations in Papua New Guinea in 2014, and by the end of 2016 had enrolled a phenomenal 600,000 customers, almost 85% of whom being covered by insurance for the first time. PFIP provided an investment grant to BIMA in 2014 under the EU’s aforementioned RED 2 programme, enabling BIMA to expand outreach in the underdeveloped Highlands region, through reducing delivery costs, while improving customer service.
Considering insurance is mostly taken out by breadwinners to reduce the financial burden on their families in case of their death or hospitalization, and that the average Papua New Guinean household has five members, we can infer that by 2016, almost one-quarter of Papua New Guineans (24%) were in fact benefitting from this one innovative product. This is an astounding achievement in a market such as Papua New Guinea.
In a country where large sections of populations in the region remain unserved or underserved by traditional insurance providers, with an estimated less than 10% of the population having coverage, BIMA is showing how applying a “how to” mentality to a business opportunity can achieve results in terms of customer access, usage and coverage. In the space of a few years BIMA identified an opportunity, created a market and changed an industry.
BIMA attributes its success to a deeply embedded customer-centric approach, focusing on meeting a key and previously unmet need of its target customers in providing protection from financial shocks resulting from hospitalization or death. To do so, BIMA created a new financial services ecosystem that involves Digicel as the mobile network operator, Capital Insurance as the underwriting insurer and BIMA as agent, utilising the competencies, expertise and infrastructure of each partner in a collaborative way.
Having proven its business model in Papua New Guinea, in 2016 BIMA embarked on another innovation through an ambitious expansion strategy, setting up a ‘Pacific Hub’ in Fiji which will offer low-cost insurance to five countries in the region. So far, this has proven successful in Fiji with over 30,000 customers holding 57,000 policies by March 2017. BIMA thus embodies a truly innovative approach to financial inclusion in the Pacific, and sets a clear example for others in the financial services sector.
PFIP is extremely proud to support BIMA in the above-mentioned achievements and to be able to present this well-deserved award to BIMA here tonight. The winner of the 2017 RJS Innovation Award will have big shoes to fill, and we are excited about the possibilities of reaching even greater heights. We are currently looking for our next winner, and encourage our partners present here tonight to work with us to innovate and create better livelihoods for Pacific Islanders.
Of course, none of this would be possible without the support of our funders, the European Union, the Australian and New Zealand governments and the United Nations Capital Development Fund and United Nations Development Programme, who continue to believe in our vision for financially-inclusive Pacific.